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November 14, 2012 - Bloomberg L.P.
Jim Silver: "Monster High is one of the hottest doll brands - actually thé hottest doll brand of the toy business from Mattel Toys. They introduced it two years ago and they are all daughters of famous monsters. So this is Draculaura , the daughter of Dracula and there's a whole line and this has gone from 20 million dollars to about 375 million dollars this year." Tom Keene: "Is it the new Barbie or is it an add-on to the traditional toy business?" Jim Silver: "This is something that older girls will want. Barbie generally-" Tom Keene: "Like 25 or 30?" Jim Silver: "Not that old, but you do have some parents that love it. But Barbie is generally strong from ages 3 to 6, and Mattel found out that girls 6 and older still wanted dolls, but a lot of them didn't want Barbie. So, they needed something a little edgier and cooler for the older girls." Scarlet Fu: "What is the prospect for toys that are not affiliated with a movie franchise? When you walk into a toy store everything is linked to some kind of movie. What if you don't want that? Is there a big market for that?" Jim Silver: "There are plenty of toys. Only about 30% to 35% of all toys is licensed. And if you walk down the preschool isle, there are many non-licensed toys. It is really prominent in the action figure isle. Maybe some of the preschool, but you go to the activity isle and you see a lot of Crayola, which is a 300 million dollar brand. And so the majority of toys are not licensed." Scarlet Fu: "But is the goal to get Monster High her own movie franchise then?" Jim Silver: "Monster High will become a movie. They just announced around 2014 - this is Mattel's own IP - they announced a producer and director and you will see a Monster High movie." Tom Keene: "There was a period where toys struggled. I remember Toys"R"Us struggled and all that. Is it a boom time for toys, as a general statement?" Jim Silver: "Toys overall is a flat business. You go over the last 15 years and they do about 22 billion dollar a year wholesale. Sometimes down 1%, 2%, or up 1 or 2%, but it generally stays the same. Till people stop having kids, the toy market is generally the same and it's a fight between retailers of market share and manufacturers of market share." Scarlet Fu: "Well, lets bring in some numbers here because Bloomberg Industries took an exclusive look at how the major retailers are setting prices ahead of the holiday shopping season. What they found was that Amazon's beat Walmart's online prices on a wide selection of toys, and, early November, Toys"R"Us has the most expensive toys when compared with Walmart, Target, Kmart, and Amazon. Retailers are better stocked on toys this year than last year; Target was most out-of-stock followed by Walmart - target at 8%, Walmart at 3%. Being stocked properly is obviously a big concern. How do the retailers stock for toys in a year like this, when there's so much uncertainty." Jim Silver: "They bet generally on the hottest toys. Toy stores are stocked better on toys than the other retailers because they are in the toy business 52 weeks a year, so they can carry more inventory. Also when you look at a Toys"R"Us, they carry about 7000 SKUs where Target and Walmart carry about 2000." Tom Keene: "And what does Amazon carry?" Jim Silver: "Well, Amazon carries much more in terms of specialty and warehouses not as much as Toys"R"Us. They don't buy as deep. Now, what is very interesting is that the price wars have already began. And you have to follow the prices closely as a consumer because they will fluctuate, and a great example is the Monster High High School. Target has struggled a little bit, because they didn't have a layway program this year and Toys"R"Us, Walmart, and Kmart have aggressive layway programs. So something like the Monster High High School, which is around 80 dollars; Target broke price this weekend and burned it down to 59,99 to try induce customers into their stores." Tom Keene: "What is the toy of the year? The must-have for this holiday season?" Jim Silver: "There is never one toy of the year. We come out with about fifteen different toys, because a 3-year old boy wants something different than a 5-year old girl and she than an 8-year old girl. So things like Monster High, Furby, and Doc-" Tom Keene: "Furby?" Jim Silver: "Furby actually disappeared and came back this year as a much better toy." Tom Keene: "That's great!" Source Category:Press coverage